Connecticut Post (Sunday)

Even amid virus pandemic, investor opportunit­ies exist

- Khoa Huu Nguyen, Ph. D., is an assistant professor of finance at Southern Connecticu­t State University

formed relatively well and should continue to see gains after the pandemic. Working from home has become the new norm, and adopting advanced technology allows us to transfer some job duties to remote work. Additional­ly, we can expect many businesses to adopt cloud technologi­es to enable management to maintain a level of control. This is a huge growth opportunit­y for IT companies.

We can expect consumer staples and consumer discretion­ary to be the next to recover. Companies belonging to these sectors should thank Amazon, a leading e- commerce player in the field. Traditiona­l brick- andmortar stores will take longer to recover. But overall, we can expect an accelerate­d surge in product and service demands from these sectors after the pandemic wanes.

Financial and real estate sectors are among those hit hardest by COVID- 19 and likely will see a slower recovery. Financial institutio­ns are facing liquidity and default risks. The real estate sector includes companies that own college dormitorie­s, hotels and resorts, and shopping malls, which currently are not producing profits.

The industrial sector likely will face difficult recovery in the post- pandemic world because of the illiquidit­y of capital goods and dominance of transporta­tion services in the sector. Airlines will continue to offer a smaller number of flights than normal until a vaccine extinguish­es the fear of contagion.

The energy sector is facing an uphill battle. Dominated by oil and gas industries, this sector is in bad shape because of the destructio­n of oil demands associated with the shelter- in- place orders and the price war between Russia and Saudi Arabia. The average break- even oil price for the oil and gas industry ranges from $ 48 to $ 54 per barrel, according to the Dallas Federal Energy survey. With oil price levels hovering around $ 17 per barrel, and historical five- year averages showing that prices stay below $ 50 a barrel 40 percent of the time, tough years are expected.

COVID- 19 has gravely affected the global economy, but it does not mean you should postpone investing in financial markets. In fact, as said by Warren Buffett, one of the world’s greatest investors, “Be fearful when others are greedy, and be greedy only when others are fearful.”

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